Dutch Inflation rate among lowest in Europe

Dutch Inflation rate among lowest in Europe

The Dutch inflation rate in March 2011 was one of the lowest in Europe. Only in Ireland, Sweden and the Czech Republic, inflation was lower, according to figures by the Dutch Central Bureau of Statistics (CBS) published Wednesday.

The difference with average inflation in the EU is mainly caused by prices changes for energy and foodstuffs. The Netherlands has had one of the lowest rates of inflation in the EU for years now. Tax measures have less effect on price developments in the Netherlands than on average in the EU.

In March 2011 inflation in the EU was 3.1 percent. In the Netherlands it was 2.0 percent. The difference between Dutch inflation and the average inflation in the EU is mainly accounted for by developments in energy prices. Energy companies in the Netherlands mostly adjust their prices in January and in July. In other countries energy prices react more quickly to developments in oil prices.

In addition, in the rest of the EU households use more domestic fuel oils than in the Netherlands. And it is precisely for these products that prices have risen substantially.

The increase in food prices was larger in the rest of the EU than in the Netherlands. In eastern Europe, in particular, these prices have risen substantially. Also, Europeans spend more on food than the Dutch. As a result an increase in prices of food and non-alcoholic drinks has a stronger upward effect on inflation in the EU than in the Netherlands.

Dutch prices were 7.7 percent higher in December 2010 than fives years previously. Changes in excise rates and other tax measures accounted for 0.7 of a percentage point of this price increase. In other EU countries tax increases accounted for more of the price increase, especially in eastern Europe. Romania beat everyone in this respect: more than 12 percentage points of the total price increase of 35 percent were accounted for by tax measures.

Source: CBS

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